How to keep traffic flowing without imposing a tax
Author:
Mark Milke
2000/11/08
Back in 1984, Brian Mulroney and John Turner squared off in an election debate over patronage. As part of the deal Turner made with the departing Pierre Trudeau, Turner appointed a slew of federal Liberals to patronage posts and, in a televised debate, the Liberal leader squirmed and argued he "had no option." Mulroney saw an opening, attacked, told him he did have an option - he could have said "no."
Sixteen years later, taxpayers in greater Vancouver are once again facing politicians, this time local, who argue there is no option but to pay a new TransLink auto tax for road and transit improvements. (They call it a "levy," but if quacks like a duck….) TransLink chair George Puil argues the choice is between a $120 auto tax for an SUV (which will be at least $145 in 2005 and $186 in 2010) or no infrastructure improvements. TransLink CEO Ken Dobell makes it clear that those who do not pay will not receive AirCare permits and thus no auto insurance. Some choice.
But greater Vancouver politicians and TransLink bureaucrats do have other options and it is time they considered them. When municipal politicians meet federal Finance Minister Paul Martin today to demand federal gas tax money, their plea would have more punch if they came to the table with cash from their own budgets - $2 billion is spent annually by member cities in the Greater Vancouver Regional District.
Of course, federal fuel taxes are also worth looking at. Ten cents out of every litre sold in the GVRD goes to Ottawa, a take worth about $230 million (not including GST revenue). A third possibility is to pressure the provincial government to speed up its gas tax revenue transfer. Currently, GVRD motorists send 15 cents a litre (about $345 million) to Victoria while 8 cents a litre is transferred back; that is scheduled to climb to 10 cents a litre over the next couple of years.
Put those numbers up against the money TransLink wants from a new auto tax: $95 million in its first full year. If our politicians re-learned the kindergarten lesson on sharing, the TransLink tax could be killed.
For example, a 4.75 percent diversion in existing civic spending in the district would completely cover the $95 million TransLink is after. If local politicians argue they cannot divert that amount they should look to the city of Edmonton as an example. Three years ago city councilors there instructed the city manager to find $50 million in possible cost-savings - five percent of a one billion-dollar budget. He did and they chose $31 million of that, all of it without service cuts.
But even if GVRD politicians refuse to find $95 million in existing budgets, why not a diversion of even 1.5 percent ($30 million)? Provincial and federal governments would need to kick in $65 million. As each cent and a half in fuel tax is worth $34.5 million, Victoria and Ottawa could each give up that amount to TransLink and that would raise $69 million. The combination of diverted civic spending and help from senior governments would be more than enough to kill the proposed auto tax.
Granted there are some problems; the provincial government still adds to the overall debt and until that stops new money should be off-limits. But then, they could and should also look in their own existing spending envelope for the cash; the Province did, after all, download the infrastructure dilemma knowing that more money was needed. And it made much more political sense to have TransLink impose a new tax than an unpopular NDP government. There is also the problem of getting Paul Martin to commit money. But this is an election; politicians and voters could remind Mr. Martin that the Alliance plan calls for a cent and a half reduction in fuel taxes, precisely the amount that would be Ottawa's required share under the above scenario. Local voters and politicians should not be shy about arm-twisting federal MPs during an election; our wallets are twisted for the other four years of a government's mandate. Or then again, local mayors and councilors could simply do it out of their own $2 billion civic budgets.
Regardless, TransLink and the politicians do have options - other than a new tax or no improvements - and the public should remind them of those facts. In the meantime, TransLink and the politicians should spare the public the "John Turner defense."